International Accounting Standards
International Accounting Standards
International Accounting Standards
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32<br />
Solvency II<br />
IFRS on Insurance and SII differences:<br />
IFRS:<br />
SII:<br />
IFRS:<br />
SII:<br />
IFRS:<br />
SII:<br />
IFRS:<br />
SII:<br />
applies to insurance contracts<br />
applies to "regulated products" (may not be insurance<br />
contracts)<br />
Risk margin to be based on market consistent principles<br />
Risk margin is based on cost of capital approach<br />
Takes future cash flows only if certain conditions are met<br />
Takes all cash flows in a contract, e.g a 25 year contract<br />
Discounting basis is the risk free rate as per the DP<br />
Use of swap rate (market rate should be calculated to match<br />
the currency, duration and liquidity of the cash flows)<br />
32
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